San Francisco’s Apartment Occupancy Takes Surprising Turn – Globe St.

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There was a time when the fact that apartments in San Francisco enjoyed 95.4% occupancy in January would not have been considered a big deal. But in January this year that changed.

A RealPage Market Analytics report noted San Francisco’s achievement “isn’t spectacular.” However, it was good enough to save it from the fate of other big markets with relatively high occupancy rates that saw occupancy fall or stagnate.

While San Francisco experienced a 0.4%, 40 basis-point increase in occupancy on an annual basis, Minneapolis saw no annual change in its 94.2% occupancy level, and it dipped 0.1% to 94.6% in Detroit and 94.8% in West Palm Beach. Annual declines reached as low as 140 bps in some big-supply Sun Belt markets, the report noted.

One factor helping San Francisco was that apartment demand and supply were more or less in balance in 2023. Demand stood at 1,623 units, and concurrent deliveries at 1,687. By comparison, runner-up San Jose had 461 more units available than demand during the year.

However, demand did not fully account for San Francisco’s resilience, the report noted, since demand was not equal to what the metro typically posts and was not as strong as in some other markets. Furthermore, while the city retains its draw for younger age groups, the U.S. Census shows its population fell by 0.8% in 2022 and job growth is tepid at just 1.4% or 18,300 in the past year.

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